Capital-light model enables high dividend and M&A
Coor is a leading provider of facility management services in the Nordics (~50% of sales from Sweden). ~70% of sales are from subscriptions, while the largest client is ~5% of sales. The market is fragmented (Coor is one of the largest players with ~5% market share) and there are benefits of scale, which the company is capitalising on through M&A. Growth has been solid (7% CAGR '14-'23: 4% organic, 3% M&A) and margins stable (5-6% EBITA margins), although inflationary pressure and company-specific challenges held back earnings in 2023 (adj. EBITA -4%). Price increases and streamlining initiatives should lead to improved profitability in '24e-'25e, however. Furthermore, its asset-light characteristics (1% capex/sales, neg. NWC, >100% ROCE ex GW) facilitate a good cash conversion (~70% of adj. EBITA) and a high payout ratio (>100% of acc. adj. net profit).
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